<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------

                                    FORM 10-Q

    (Mark One)

       [ X ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended   December 31, 2003

                                       OR

       [   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

For the transition period from_______________to_______________

                        Commission file number: 001-15035

                                ABLE ENERGY, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                                            22-3520840
(State or other jurisdiction of                            (I.R.S. employer
incorporation or organization)                             identification No.)

          198 GREEN POND ROAD
          ROCKAWAY, NJ                                          07866
(Address of principal executive offices)                      (Zip code)

Registrant's telephone number, including area code: (973) 625-1012


                                 NOT APPLICABLE
   (Former name, former address and former fiscal year, if changed since last
                                    report)


      Indicate by check X whether registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]

      As of February 9, 2004, 2,013,250 shares, $.001 Par value per share, of
Able Energy, Inc. were issued and outstanding.


                       ----------------------------------

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                         PAGE
                                                                         ----

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)

    Consolidated Balance Sheets as of June 30, 2003 and
       December 31, 2003                                                3 - 4

    Consolidated Statements of Income for the three and six
       months ended December 31, 2003 and 2002                          5

    Consolidated Statement of Stockholders' Equity six months
       ended December 31, 2003                                          6

    Consolidated Statements of Cash Flows for the six months
       ended December 31, 2003 and 2002                                 7 - 8

    Notes to Unaudited Financial Statements                             9 - 30

<PAGE>

<TABLE>
<CAPTION>
                                 ABLE ENERGY, INC. AND SUBSIDIARIES

                                     CONSOLIDATED BALANCE SHEET


                                               ASSETS
                                               ------

<S>                                                                    <C>             <C>
                                                                       December 31,       June 30,

                                                                          2003              2003

Current Assets:                                                        (Unaudited)      (Audited)
                                                                       -----------      ---------
    Cash                                                               $   391,534    $   400,033
    Accounts Receivable (Less Allowance for Doubtful
       Accounts of  $90,472 (December 31) and $279,913 (June 30)         3,221,559      2,661,808
    Inventory                                                            1,293,138        789,422
    Notes Receivable - Current Portion                                      63,133         57,577
    Miscellaneous Receivables                                               89,798         70,503
    Prepaid Expenses                                                       475,433        395,982
    Insurance Claim Receivable                                                   -        349,526
    Deferred Costs - Insurance Claims                                      828,786        703,675
    Prepaid Expense - Income Taxes                                           2,063          2,063
    Deferred Income Tax                                                     33,047         73,777
                                                                       -----------      ---------
        Total Current Assets                                             6,398,491      5,504,366
                                                                       -----------      ---------

Property and Equipment:
    Land                                                                   479,346        451,925
    Buildings                                                              946,046        946,046
    Trucks                                                               3,551,189      3,125,453
    Fuel Tanks                                                           1,567,615      1,455,501
    Machinery and Equipment                                                784,057        769,817
    Leasehold Improvements                                                 612,935        597,759
    Cylinders                                                              755,496        755,496
    Office Furniture and Equipment                                         200,640        200,640
    Website Development Costs                                            2,317,994      2,274,575
                                                                       -----------      ---------
                                                                        11,215,318     10,577,212
    Less: Accumulated Depreciation and Amortization                      4,918,731      4,331,055
                                                                       -----------      ---------
        Net Property and Equipment                                       6,296,587      6,246,157
                                                                       -----------      ---------

Other Assets:
    Deferred Income Taxes                                                   45,091         45,091
    Deposits                                                               132,720        165,541
    Notes Receivable - Less Current Portion                                170,237        177,793
    Customer List, Less Accumulated Amortization of ($188,122)
        December 31 and June 30.                                           422,728        422,728
    Covenant Not to Compete, Less Accumulated Amortization of
        $86,667 (December 31) and $76,667 (June 30).                        13,333         23,333
    Development Costs - Franchising                                         22,977         27,573
                                                                       -----------      ---------
         Total Other Assets                                                807,086        862,059
                                                                       -----------      ---------
        Total Assets                                                   $13,502,164    $12,612,582
                                                                       ===========    ===========
</TABLE>



                             See Accompanying Notes
                                        3
<PAGE>

<TABLE>
<CAPTION>
                                                 ABLE ENERGY,  INC. AND SUBSIDIARIES

                                                 CONSOLIDATED BALANCE SHEET (Cont'd)


                                                 LIABILITIES & STOCKHOLDERS' EQUITY



<S>                                                                    <C>             <C>
                                                                      DECEMBER 31,       JUNE 30,

                                                                          2003             2003

CURRENT LIABILITIES:                                                   (UNAUDITED)      (AUDITED)
                                                                       -----------      ---------
    Accounts Payable                                                   $ 2,951,094    $ 1,420,911
    Note Payable - Bank                                                    700,000             -
    Note Payable - Other                                                   335,000        335,000
    Current Portion of Long-Term Debt                                      357,367      1,238,982
    Accrued Expenses                                                       634,597        735,370
    Accrued Taxes                                                           27,640         98,612
    Customer Pre-Purchase Payments                                       1,254,228        936,680
    Customer Credit Balances                                               673,060        416,644
    Escrow Deposits                                                          5,000          5,000
    Note Payable - Officer                                                 320,188        321,630
                                                                             9,333        -
                                                                       -----------      ---------
        TOTAL CURRENT LIABILITIES                                        7,267,507      5,508,829

DEFERRED INCOME                                                             79,679         79,679
DEFERRED INCOME TAXES                                                       76,980         70,310
SHORT-TERM DEBT REFINANCED                                                       -      3,170,000
LONG-TERM DEBT: less current portion                                     4,694,198        296,472
                                                                       -----------      ---------
        TOTAL LIABILITIES                                               12,118,364      9,125,290
                                                                       -----------      ---------

STOCKHOLDERS' EQUITY:
    Preferred Stock
    Authorized 10,000,000 Shares Par Value $.001 per share
     Issued - None
    Common Stock
    Authorized 10,000,000 Par Value $.001 per share Issued
      and Outstanding Shares 2,013,250 (2003) and 2,007,250 (2002)           2,014          2,014
    Paid in Surplus                                                      5,711,224      5,711,224
    Retained Earnings (Deficit)                                         (4,329,438)    (2,225,946)
                                                                       -----------      ---------
        TOTAL STOCKHOLDERS' EQUITY                                       1,383,800      3,487,292
                                                                       -----------      ---------
        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $13,502,164    $12,612,582
                                                                       ===========    ===========
</TABLE>

                             See Accompanying Notes
                                        4

<PAGE>

<TABLE>
<CAPTION>
                                            ABLE ENERGY, INC. AND SUBSIDIARIES
                                            ----------------------------------

                                           CONSOLIDATED STATEMENT OF OPERATIONS
                                           ------------------------------------

                                                       (UNAUDITED)



                                                            THREE MONTHS DECEMBER 31,     SIX MONTHS ENDED DECEMBER 31,
                                                            -------------------------     -----------------------------

<S>                                                        <C>             <C>              <C>              <C>
                                                              2003           2002             2003               2002
                                                              ----           ----             ----               ----
NET SALES                                                  $12,427,350     $12,453,732      $19,277,562      $18,687,071

COST OF SALES                                               10,876,794       9,934,503       16,840,256       15,337,328

   GROSS PROFIT                                              1,550,556       2,519,229        2,437,306        3,349,743

EXPENSES
   Selling, General and Administrative Expenses              1,543,776       1,218,992        3,186,821        2,430,518
   Depreciation and Amortization Expense                       319,981         297,265          633,047          594,671
      Total Expenses                                         1,863,757       1,516,257        3,819,868        3,025,189

   INCOME (LOSS) FROM OPERATIONS                              (313,201)      1,002,972       (1,382,562)         324,554

OTHER INCOME (EXPENSES):
   Interest and Other Income                                    35,452          33,279           63,923           66,114
   Interest Expense                                           (111,776)       (107,963)        (434,204)        (189,086)
   Legal and Professional Fees relating to Other Expense      (173,042)         -              (303,249)          -
      TOTAL OTHER INCOME (EXPENSES)                           (249,366)        (74,684)        (673,530)        (122,972)

   INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES            (562,567)        928,288       (2,056,092)         201,582

PROVISION (REDUCTION) FOR INCOME TAXES                          29,635           3,880           47,400            7,000

   NET INCOME (LOSS)                                         $(592,202)      $ 924,408      $(2,103,492)     $   194,582

BASIC INCOME (LOSS) PER COMMON SHARE                         $    (.29)      $     .46      $     (1.04)     $       .10

DILUTED INCOME (LOSS) PER COMMON SHARE                       $    (.29)      $     .45      $    ( 1.04)     $       .09

WIGHTED AVERAGE NUMBER OF COMMON SHARES
   OUTSTANDING - USED IN BASIC                               2,013,250       2,006,855        2,013,250        2,006,855

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
   OUTSTANDING - USED IN DILUTED                             2,013,250       2,057,512        2,013,250        2,057,512

</TABLE>







                             See Accompanying Notes
                                        5

<PAGE>

<TABLE>
<CAPTION>
                               ABLE ENERGY, INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                               SIX MONTHS ENDED DECEMBER 31, 2003

                                           (UNAUDITED)




                                      COMMON STOCK
                                     .001 PAR VALUE
                                     --------------
<S>                              <C>         <C>       <C>            <C>          <C>
                                                      ADDITIONAL                     TOTAL
                                                       PAID-IN        RETAINED    STOCKHOLDERS'
                                 SHARES      AMOUNT    SURPLUS        EARNINGS       EQUITY
                                 ------      ------    -------        --------       ------

Balance - July 1, 2003          2,013,250   $ 2,014   $5,711,224    $(2,225,946)   $3,487,292

Net (Loss)                                                           (2,103,492)   (2,103,492)
                                ---------     -----    ---------     ----------    ----------
Balance - December 31, 2003     2,013,250    $2,014   $5,711,224    $(4,329,438)   $1,383,800
                                =========    ======   ==========    ===========    ==========
</TABLE>





























                             See Accompanying Notes
                                        6

<PAGE>

<TABLE>
<CAPTION>
                               ABLE ENERGY, INC. AND SUBSIDIARIES

                               CONSOLIDATED STATEMENT OF CASH FLOW

                                           (UNAUDITED)




                                                                SIX MONTHS ENDED DECEMBER 31
                                                                          UNAUDITED
                                                                          ---------
<S>                                                                <C>               <C>
                                                                     2003             2002
                                                                     ----             ----
CASH FLOW FROM OPERATING ACTIVITIES
-----------------------------------
   Net Income (Loss) - Continuing Operations                      $(2,103,492)     $   194,582
   Adjustments to Reconcile Net Income to Net Cash
    used by Operating Activities:
      Depreciation and Amortization                                   633,047         594,671
      Directors' Fees                                                  -               24,000
      Loss on Disposal of Equipment                                    -                  842
      (Increase) Decrease in:
         Accounts Receivable                                         (559,751)      (1,626,729)
         Inventory                                                   (503,716)        (250,243)
         Prepaid Expenses                                             (79,451)         (31,646)
         Deposits                                                      32,821             -
         Insurance Claims                                             349,526             -
         Deferred Costs Insurance Claims                             (125,111)            -
         Deferred Income Tax - Asset                                   40,730             -
      Increase (Decrease) in:
         Accounts Payable                                           1,530,183          942,526
         Accrued Expenses                                            (100,773)         (65,064)
         Customer Advance Payments                                    317,548            4,005
         Taxes Payable                                                (70,972)           4,011
         Customer Credit Balance                                      256,416         (134,769)
         Deferred Income Taxes                                          6,770            7,000
         Deferred Income                                                9,333             -
         Escrow Deposits                                               -               (12,400)
                                                                   ----------        ---------
           NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES          (366,892)        (349,214)
                                                                   ----------        ---------
CASH FLOW FROM INVESTING ACTIVITIES
   Purchase of Property and Equipment                                (699,322)        (383,731)
   Web Site Development Costs                                         (43,419)            -
   Disposition of Equipment                                            73,860             -
   Increase in Deposits                                                     -          (32,500)
   Payment on Notes Receivable - Sale of Equipment                      2,000            8,965
   Note Receivable - Montgomery                                             -              655
   Other Receivables                                                  (19,395)         (12,800)
                                                                   ----------        ---------
         Net Cash (Used) Provided  By Investing Activities         $ (686,276)      $ (419,411)
                                                                   ==========       ==========
</TABLE>



                             See Accompanying Notes
                                        7
<PAGE>

<TABLE>
<CAPTION>
                               ABLE ENERGY, INC. AND SUBSIDIARIES

                          CONSOLIDATED STATEMENT OF CASH FLOW (CONT'D)

                                           (UNAUDITED)



                                                                  SIX MONTHS ENDED DECEMBER 31
                                                                          UNAUDITED
                                                                          ---------
<S>                                                                   <C>               <C>
                                                                      2003              2002
                                                                      ----              ----
CASH FLOW FROM FINANCING ACTIVITIES
   (Decrease) in Notes Payable - Bank                             $(1,270,000)       $(200,000)
   Increase in Notes Payable - Other                               (1,250,000)         750,000
   Note Payable - Bank                                                700,000             -
   Decrease in Long-Term Debt                                      (1,939,112)        (288,067)
   Increase in Long-Term Debt                                       4,805,223          331,163
   Note Payable - Officer                                              (1,442)          50,000
                                                                    ---------        ---------
           NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES         1,044,669          643,096
                                                                    ---------        ---------
NET (DECREASE) INCREASE IN CASH
Cash - Beginning of Year                                               (8,499)        (125,529)
Cash - End of Year                                                    400,033          258,560
                                                                    ---------        ---------
                                                                    $ 391,534        $ 133,031
                                                                    =========        =========

The Company had Interest Cash Expenditures of:                      $ 424,598        $ 195,099
The Company had Tax Cash Expenditures of:                           $  54,508        $   7,017

</TABLE>



















                             See Accompanying Notes
                                        8
<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------



Note 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------------

                  PRINCIPLES OF CONSOLIDATION
                  The consolidated financial statements include the accounts of
                  Able Energy, Inc. and its subsidiaries. The minority interest
                  of 1% in Able Propane, LLC is immaterial and has not been
                  shown separately. All material inter-company balances and
                  transactions were eliminated in consolidation.

                  MAJORITY OWNERSHIP
                  The Company is the majority owner, owning 70.6% of the issued
                  shares of a subsidiary, PriceEnergy.Com, Inc. in which their
                  capital investment is $25,000. The subsidiary has established
                  a E-Commerce Operating System for the sale of products through
                  a network of suppliers originally on the East Coast of the
                  United States. The Web Site became active in October 2000 (See
                  Notes 8 and 13)

                  MINORITY INTEREST
                  The minority interest in PriceEnergy.Com, Inc. is a deficit
                  and, in accordance with Accounting Research Bulletin No. 51,
                  subsidiary losses should not be charged against the minority
                  interest to the extent of reducing it to a negative amount. As
                  such, the losses have been charged against the Company, the
                  majority owner. The loss for six months ended December 31,
                  2003 is $348,033 (See Notes 8 and 13).

                  The consolidated interim financial statements included herein
                  have been prepared by the Company, without audit, pursuant to
                  the rules and regulations of the Securities and Exchange
                  Commission. Certain information and footnote disclosures
                  normally included in financial statements prepared in
                  accordance with generally accepted accounting principles have
                  been condensed or omitted pursuant to such rules and
                  regulations, although the Company believes that the
                  disclosures are adequate to make the information presented not
                  misleading.

                  These statements reflect all adjustments, consisting of normal
                  recurring adjustments which, in the opinion of management, are
                  necessary for fair presentation of the information contained
                  therein. It is suggested that these consolidated financial
                  statements be read in conjunction with the financial
                  statements and notes thereto included in the Company's annual
                  report for the year ended June 30, 2003. The Company follows
                  the same accounting policies in preparation of interim
                  reports.



                                        9

<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------


NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
------------------------------------------------------------------

                  Results of operations for the interim periods are not
                  indicative of annual results.

                  NATURE OF OPERATIONS
                  Able Oil Company, Able Melbourne and Able Energy New York,
                  Inc. are full service oil companies that market and distribute
                  home heating oil, diesel fuel and kerosene to residential and
                  commercial customers operating in the northern New Jersey,
                  Melbourne, Florida, and Warrensburg, New York respectively.
                  Able Propane, installs propane tanks which it owns and sells
                  propane for heating and cooking, along with other residential
                  and commercial uses.

                  The Company's operations are subject to seasonal fluctuations
                  with a majority of the Company's business occurring in the
                  late fall and winter months. Approximately 70% of the
                  Company's revenues are earned and received from October
                  through March, and the overwhelming majority of such revenues
                  are derived from the sale of HVAC products and services and
                  home heating fuel. However, the seasonality of the Company's
                  business is offset, in part, by the increase in revenues from
                  the sale of diesel and gasoline fuels during the spring and
                  summer months due to the increased use of automobiles and
                  construction apparatus.

                  INVENTORIES
                  Inventories are valued at the lower of cost (first in, first
                  out method) or market.

                  PROPERTY AND EQUIPMENT
                  Property and equipment are stated at cost less accumulated
                  depreciation. Depreciation is provided by using the
                  straight-line method based upon the estimated useful lives of
                  the assets (5 to 40 years). Depreciation expense for the six
                  months ended December 31, 2003 and 2002 amounted to $388,970
                  and $360,025, respectively.

                  For income tax basis, depreciation is calculated by a
                  combination of the straight-line and modified accelerated cost
                  recovery systems established by the Tax Reform Act of 1986.

                  Expenditures for maintenance and repairs are charged to
                  expense as incurred whereas expenditures for renewals and
                  betterments are capitalized.

                  The cost and related accumulated depreciation of assets sold
                  or otherwise disposed of during the period are removed from
                  the accounts. Any gain or loss is reflected in the year of
                  disposal.




                                       10


<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------



NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
------------------------------------------------------------------

                  E-COMMERCE OPERATING SYSTEM DEVELOPMENT COSTS
                  Costs of $2,317,944 incurred in the developmental stage and
                  thereafter for computer hardware and software have been
                  capitalized in accordance with accounting pronouncement
                  SOP98-1. The costs are included in Property and Equipment and
                  will be amortized on a straight line basis during the
                  estimated useful life, 5 years. Operations commenced in
                  October 2000. Amortization for the six months ended December
                  31, 2003 and 2002 amounted to $229,481 and $220,050,
                  respectively.

                  INTANGIBLE ASSETS
                  Intangibles are stated at cost and amortized as follows:
                  Customer Lists of $571,000 related to the Connell's Fuel Oil
                  Company acquisition on October 28, 1996, by Able Oil Company
                  was being amortized over a straight-line period of 15 years.
                  The current period amortization also includes a customer list
                  of $39,850 and Covenant Not To Compete of $100,000 relating to
                  the acquisition from B & B Fuels on August 27, 1999, is being
                  amortized over a straight-line period of 10 and 5 years,
                  respectively. The amortization for the six months ended
                  December 31, 2003 and 2002 are $10,000 and $10,000,
                  respectively.

                  In July 2001, the Financial Accounting Standards Board
                  ("FASB") issued Statement of Financial Accounting Standards
                  No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142").
                  SFAS 142 requires goodwill and other intangible assets to be
                  tested for impairment under certain circumstances, and written
                  off when impaired, rather than being amortized as previous
                  standards required, as such, effective July 1, 2001, the
                  Customer List will no longer be amortized for financial
                  statement purposes.

                  For income tax basis, the Customer Lists and the Covenant Not
                  To Compete are being amortized over a straight-line method of
                  15 years as per the Tax Reform Act of 1993.

                  USE OF ESTIMATES
                  The preparation of financial statements in conformity with
                  generally accepted accounting principles requires management
                  to make estimates and assumptions that affect the amounts
                  reported in the financial statements and accompanying notes.
                  Although these estimates are based on management's knowledge
                  of current events and actions it may undertake in the future,
                  they may ultimately differ from actual results.



                                       11



<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------


NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
------------------------------------------------------------------

                  INCOME TAXES
                  Effective January 1, 1997, all the subsidiaries, which were
                  S-Corporations, terminated their S-Corporation elections. The
                  subsidiaries are filing a consolidated tax return with Able
                  Energy, Inc.

                  Effective January 1, 1997, the Company has elected to provide
                  for income taxes based on the provisions of Financial
                  Accounting Standards Board ("FASB") Statement of Financial
                  Accounting Standards ("SFAS") No. 109, "Accounting for Income
                  Taxes", which requires recognition of deferred tax assets and
                  liabilities for the expected future tax consequences of events
                  that have been included in the financial statements and tax
                  returns in different years. Under this method, deferred income
                  tax assets and liabilities are determined based on the
                  difference between the financial statement and tax bases of
                  assets and liabilities using enacted tax rates in effect for
                  the year in which the differences are expected to reverse.

                  CONCENTRATIONS OF CREDIT RISK
                  The Company performs on-going credit evaluations of its
                  customers' financial conditions and requires no collateral
                  from its customers.

                  Financial instruments which potentially subject the Company to
                  concentrations of credit risk consists of checking and savings
                  accounts with several financial institutions in excess of
                  insured limits. The excess above insured limits is
                  approximately $268,363. The Company does not anticipate
                  non-performance by the financial institutions.

                  CASH
                  For the purpose of the statement of cash flows, cash is
                  defined as balances held in corporate checking accounts and
                  money market accounts.

                  ADVERTISING EXPENSE
                  Advertising costs are expensed at the time the advertisement
                  appears in various publications and other media. The expense
                  was $348,095 and $232,593 for the six months ended December
                  31, 2003 and 2002, respectively.

                  FAIR VALUE OF FINANCIAL INSTRUMENTS
                  Carrying amounts of certain of the Company's financial
                  instruments, including cash and cash equivalents, accrued
                  compensation, and other accrued liabilities, approximate fair
                  value because of their short maturities.



                                       12



<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------


NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
------------------------------------------------------------------

                  REVENUE RECOGNITION
                  Sales of fuel and heating equipment are recognized at the time
                  of delivery to the customer, and sales of equipment are
                  recognized at the time of installation. Revenue from repairs
                  and maintenance service is recognized upon completion of the
                  service. Payments received from customers for heating
                  equipment service contracts are deferred and amortized into
                  income over the term of the respective service contracts, on a
                  straight line basis, which generally do not exceed one year.

                  COMPUTATION OF NET INCOME (LOSS) PER SHARE
                  Basic net income (loss) per share is computed using the
                  weighted-average number of common shares outstanding during
                  the period. Diluted net income per share is computed using the
                  weighted-average number of common and dilutive potential
                  common shares outstanding during the period. Diluted net loss
                  per share is computed using the weighted- average number of
                  common shares and excludes dilutive potential common shares
                  outstanding, as their effect is anti-dilutive. Dilutive
                  potential common shares primarily consist of employee stock
                  options.

                  IMPAIRMENT OF LONG-LIVED ASSETS
                  Long-lived assets to be held and used are reviewed for
                  impairment whenever events or changes in circumstances
                  indicate that the carrying amount of such assets may not be
                  recoverable. Measurement of an impairment loss for long-lived
                  assets that management expects to hold and use is based on the
                  fair value of the asset. Long-lived assets to be disposed of
                  are reported at the lower of carrying amount or fair value
                  less costs to sell.

                  RECENT ACCOUNTING PRONOUNCEMENTS

                  FASB Interpretation No. 45 (FIN 45), "Guarantor's Accounting
                  and Disclosure Requirements for Guarantees, Including Indirect
                  Guarantees of Indebtedness of Others." In November 2002, the
                  FASB issued FIN 45 which requires a guarantor to recognize a
                  liability for the fair value of the obligation it assumes
                  under certain guarantees. Additionally, FIN 45 requires a
                  guarantor to disclose certain aspects of each guarantee, or
                  each group of similar guarantees, including the nature of the
                  guarantee, the maximum exposure under the guarantee, the
                  current carrying amount of any liability for the guarantee,
                  and any recourse provisions allowing the guarantor to recover
                  from third parties any amounts paid under the guarantee. The
                  disclosure provisions of FIN 45 are effective for financial
                  statements for both interim and annual periods ending after
                  December 15, 2002. The fair value measurement provisions of
                  FIN 45 are to be adopted as of July 1, 2003. The Company has
                  no obligation effected by this pronouncement.





                                       13


<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------

NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
------------------------------------------------------------------

                  RECENT ACCOUNTING PRONOUNCEMENTS (Cont'd)

                  SFAS No. 148, "Accounting for Stock-Based Compensation -
                  Transition and Disclosure (an amendment of FASB Statement No.
                  123)." In December 2002, the FASB issued SFAS No. 148, which
                  amends SFAS No. 123, "Accounting for Stock-Based
                  Compensation," and provides alternative methods of transition
                  for a voluntary change to the fair value-based method of
                  accounting for stock-based employee compensation; SFAS No. 148
                  also amends the disclosure requirements of SFAS No. 123 and
                  APB Opinion No. 28, "Interim Financial Reporting," to require
                  prominent disclosures in both annual and interim financial
                  statements about the method of accounting for stock-based
                  employee compensation and the effect of the method used on
                  reported results. The provisions of SFAS No. 148 are effective
                  for financial statements for periods ending after December 15,
                  2002. The Company will adopt SFAS No. 148 effective July 1,
                  2003. It currently has no effect on the Company.

                  DEBT EXTINGUISHMENT

                  In April 2002, the FASB issued SFAS No. 145, "Rescission of
                  FASB Statements Nos. 4, 44 and 64, Amendment of FASB Statement
                  No. 13, and technical Corrections." Among other things, this
                  statement rescinds SFAS No. 4, "Reporting Gains and Losses
                  from Extinguishment of Debt" (SFAS No. 4), which required all
                  gains and losses from extinguishment of debt to be aggregated
                  and, if material, classified as an extraordinary item, net of
                  the related income tax effect. As a result, the criteria in
                  Accounting Principles Board Opinion No. 30, "reporting the
                  Results of Operations - Reporting the Effects of Disposal of a
                  Segment of a Business, and Extraordinary, Unusual and
                  Infrequently Occurring Events and Transactions," which
                  requires gains and losses on extinguishment of debts to be
                  classified as income or loss from continuing operations, will
                  now be applied. We adopted the provisions of this statement as
                  of July 1, 2002, as it was effective for years beginning after
                  June 15, 2002.

                  EXIT COSTS AND DISPOSAL ACTIVITIES

                  In June 2002, FASB issued SFAS No. 146, "Accounting for Costs
                  Associated with Exit or Disposal Activities" (SFAS NO. 146),
                  which addresses financial accounting and reporting for costs
                  associated with exit or disposal activities and nullifies
                  Emerging Issues Task Force No. 94-3, "Liability Recognition
                  for Certain Employee Termination Benefits and Other Costs to
                  Exit an Activity (including Certain Costs Incurred in a
                  Restructuring)" (EITF 94-3). The principal difference between
                  SFAS No. 146 and EITF 94-3 relates to SFAS No. 146's
                  requirements for recognition of a liability for a cost
                  associated with an exit or disposal activity. SFAS No. 146
                  requires that a liability for a cost associated with an exit
                  or disposal activity be recognized when the liability is
                  incurred. Under EITF 94-3, a liability for an exit cost as
                  generally defined in EITF 94-3 was recognized at the date of
                  an entity's commitment to an exit plan. We will adopt the new
                  standard effective July 1, 2003. This currently has no effect
                  on the Company's operations.


                                       14


<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------

NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
------------------------------------------------------------------

                  ASSET RETIREMENT OBLIGATIONS

                  Effective January 1, 2003, the Company has adopted SFAS No.
                  143, "Accounting for Asset Retirement Obligations" (SFAS No.
                  143). This statement provides the accounting for the cost of
                  legal obligations associated with the retirement of long-lived
                  assets. SFAS No. 143 requires that companies recognize the
                  fair value of a liability for asset retirement obligations in
                  the period in which the obligations are incurred and
                  capitalize that amount as part of the book value of the
                  long-lived asset. SFAS No. 143 also precludes companies from
                  accruing removal costs that exceed gross salvage in their
                  depreciation rates and accumulated depreciation balances if
                  there is no legal obligation to remove the long-lived assets.
                  The adoption had no current effect on the financial records.

NOTE 2          NOTES RECEIVABLE
--------------------------------

         A.       The Company has a Receivable from Able Montgomery, Inc. and
                  Andrew W. Schmidt related to the sale of Able Montgomery, Inc.
                  to Schmidt, and truck financed by Able Energy, Inc. No
                  payments of principal or interest had been received for more
                  than one year. A new note was drawn dated June 15, 2000 for
                  $170,000, including the prior balance, plus accrued interest.
                  The Note bears interest at 9.5% per annum and payments
                  commence October 1, 2000. The payments will be monthly in
                  varying amount each year with a final payment of $55,981.07
                  due September 1, 2010. No payments were received in the year
                  ended December 31, 2000. In February 2001, two (2) payments
                  were received in the amount $2,691.66, interest only. In
                  September 2001, $15,124.97 was received covering payments from
                  December 2000 through October 2001, representing interest of
                  $14,804.13 and principal of $320.84. Payments were received in
                  November and December 2002, representing December 2001 and
                  January 2002, a total of $3,333.34; interest of $2,678.88, and
                  principal of $654.46.

                  The note is secured by a pledge and security agreement and
                  stock purchase agreement (Stock of Able Montgomery, Inc.),
                  dated December 31, 1998, and the assets of Andrew W. Schmidt
                  with the note dated June 15, 2000. The income on the sale of
                  the company in December 1998 and the accrued interest on the
                  drawing of the new note are shown as deferred income in the
                  amount of $79,679.18 to be realized on collection of the
                  notes.

                  Maturities of the Note Receivable are as follows:

                  For the 12 Months Ending
                         December 31,                     Principal Amount
                         ------------                     ----------------

                           2004                                 $ 25,781
                           2005                                    11,933
                           2006                                    13,118
                           2007                                    14,420
                           2008                                    15,850
                           Balance                                 87,599
                                                                 --------
                                Total                           $ 168,701
                                                                =========


                                       15

<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------


NOTE 2          NOTES RECEIVABLE (CONT'D)
-----------------------------------------

         B.       Able Oil Company has four (4) Notes Receivable for the sale of
                  oil delivery trucks to independent drivers who also deliver
                  oil for the Company. The Notes bear interest at the rate of
                  12% per annum. Two notes began December 1998, one began
                  February 1999 and one will begin in January 2004. The Notes
                  are payable eight (8) months per year September through April,
                  the oil delivery season.

                  Maturities of these Notes Receivable are as follows:

                           For the 12 Months Ended
                                  December 31,             Principal Amount
                                  ------------             ----------------
                                    2004                       $43,637
                                    2005                         21,764
                                    2006                         15,910
                                    2007                         16,358
                                                                -------
                                         Total                  $97,669
                                                                =======

NOTE 3          INVENTORIES
---------------------------
<TABLE>
<CAPTION>
                                                                     December 31,                 June 30,
                              Items                                      2003                       2003
                              -----                                      ----                       ----
<S>                                                                  <C>                        <C>
                            Heating Oil                              $ 578,954                  $ 241,107
                            Diesel Fuel                                 24,724                     18,921
                            Kerosene                                    11,945                      2,534
                            Propane                                     13,194                      8,851
                            Parts, Supplies and Equipment              664,321                    518,009
                                                                       -------                    -------
                                 Total                              $1,293,138                  $ 789,422
                                                                    ==========                  =========
</TABLE>

NOTE 4         NOTES PAYABLE BANK
---------------------------------

         A.       On September 22, 2003, the Company closed a new loan facility
                  with UPS Capital Business Credit. The facility is a $4,300,000
                  term loan, payable over fifteen (15) years with interest at
                  the prime rate, plus 1.75%, and a line of credit of $700,000
                  with interest at prime plus 1.00%. The payments on the term
                  loan, due the first of each month, include principal, interest
                  of $35,900.04, and real estate tax escrow of $2,576.63,
                  totaling $38,476.67. Real estate tax escrow of $7,745.03 was
                  paid at closing. December 31, 2003 was the first payment and
                  included nine (9) days of interest plus principal totaling
                  $20,382.02. Any payment received more than five (5) days after
                  the due date is subject to a late charge of 5% of such
                  payment. Upon the occurrence of an event of default, the loan
                  shall bear interest at five percentage points (5%) above the
                  rate otherwise in effect under the loan.



                                       16

<PAGE>





                       ABLE ENERGY, INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

                       JUNE 30, 2003 AND DECEMBER 31, 2003


NOTE 4          NOTES PAYABLE BANK (cont'd)

         A.       The collateral will be as follows for the term loan:

                  1.    A first mortgage on properties located at 344 Route 46,
                        Rockaway, NJ and 38 Diller Avenue, Newton, NJ

                  2.    A first security interest in equipment and fleet
                        vehicles

                  3.    A first security interest in the customer list

                  Terms and Collateral related to the Revolving Line of Credit

                  Interest is payable monthly on the first day of each month, in
                  arrears. This loan shall be paid down annually for a minimum
                  of thirty (30) days at the borrower's discretion, but prior to
                  renewal. The maturity is annually renewing from the closing
                  date. This part of the loan is secured by a first priority
                  lien on accounts receivable and inventory.

                  The Revolving Line of Credit will have rates supported by 75%
                  on accounts receivable less than 90 days outstanding, plus 50%
                  on inventory. The outstanding balance at December 31, 2003 is
                  $700,000.

                  The loan facility is guaranteed by Able Energy, Inc. Officers
                  loans are subordinated to the lender and will remain
                  standstill until all debt due to the lender is paid in full.

                  The agreement contains certain financial covenants:

                  1.    Limit of unfinanced capital expenditures not to exceed
                        $350,000 for fiscal year 2004.

                  The Company paid the following loans on September 22, 2003:

<TABLE>
<CAPTION>
<S>                                                                    <C>                                         <C>
                  Fleet Bank                                           $ 1,340,644 (including interest and fees of $70,644)
                  KMA Associates                                           750,000
                  Jeff Will                                                505,000 (including interest of $5,000)
                  Estate of Birdsal                                        657,895 (including interest of $7,895)
                  Long-term Debt                                         1,084,866
                                                                       -----------
                                    Total Refinance                      4,338,405
                  Other Fees and Costs Paid at Closing                     123,198
                                                                       -----------
                                    Total                              $ 4,461,603
                                                                       ===========

                  The loan advanced was $4,300,000, the balance of $161,603 was paid by the Company.

                  The balance of the term loan at December 31, is      $ 4,241,891
                  Included in current portion of long-term debt            173,697
                                                                       -----------
                  Included in long-term debt - less current portion    $ 4,068,194
                                                                       ===========
</TABLE>


                                       17

<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------

NOTE 4          NOTES PAYABLE BANK (cont'd)
-------------------------------------------

         B.       On October 22, 2001, the Company and its subsidiaries, either
                  as Borrower or Guarantor, entered into a loan and security
                  Agreement with Fleet National Bank. The bank is providing the
                  following credit facility.

                  A borrowing base of 75% of Eligible Accounts Receivable, as
                  defined in the Agreement, plus $500,000 against the value of
                  the Company's customer list, for a total amount of $1,500,000.
                  The revolving credit may also be used for Letters of Credit,
                  with the lender's approval.

                  The Letters of Credit will have an annual fee of 1.25% of the
                  face value of each Letter of Credit. The applicable interest
                  rate on the revolving credit advances will be the bank's prime
                  rate or Libor interest rate, plus 2.75%, see below increase in
                  interest rate. Interest is to be paid on the amount advanced
                  on the last day of each month.

                  The Agreement had an expiration date of November 30, 2002.
                  Fleet Bank did not renew the credit facility upon expiration
                  of the Agreement on November 30, 2002. Effective December 1,
                  2002, the bank is charging an additional annual interest of 4%
                  as the Note is in default. The total current interest rate
                  charged is currently 8.25% per annum. The Company and Lender
                  have entered into a Forbearance Agreement, where the Lender is
                  willing to forbear until May 31, 2003 from exercising its
                  rights and remedies. The Lender will receive a forbearance fee
                  of $50,000 at May 31, 2003, reduced by $2,500 for each week
                  prior to May 31, 2003, that the credit facility and all
                  charges are paid in full, with a minimum forbearance fee of
                  $15,000. The interest charged is at 8.25% per annum. The
                  principal amount outstanding is $1,270,000. Interest for the
                  three months ended December 31, 2003 was $18,062. The loan and
                  the $50,000 forbearance fee were not paid at May 31, 2003. The
                  note payable plus forbearance fee, accrued interest and other
                  costs were paid in full on September 22, 2003, in the amount
                  of $1,340,644 (See Note 4 A). The bank released all the
                  collateral securing the Company debt.

NOTE 5          NOTES PAYABLE
-----------------------------

         A.       The Company has borrowed $500,000 from an unrelated
                  individual. The Note was dated June 26, 2001 with interest at
                  12% per annum. The interest will be paid monthly at $5,000 per
                  month commencing on August 1, 2001. The Note will mature on
                  June 26, 2002 unless the borrower (the Company), at its
                  option, elects to extend the maturity date to December 26,
                  2002. The Company has exercised its option and has extended
                  the Note to December 26, 2002. The lender has granted the
                  Company an additional extension at the same terms to June 26,
                  2003. The Lender has granted the Company an extension to July
                  26, 2003. The Note may be prepaid in whole or part from
                  time-to-time without penalty. No principal payments have been
                  made on the Note. At the maturity date, a final payment of the
                  unpaid principal and interest shall be due and payable. In
                  connection with this Note, the Company has issued the lender
                  warrants to purchase 40,000 shares of its common stock at $4
                  per share. The warrants vest immediately and must be exercised
                  no later than June 26, 2004. The warrants have not been
                  registered under the Securities Act of 1933. The Note was paid
                  in full on September 22, 2003 (See Note 4 A).



                                       18

<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------

NOTE 5          NOTES PAYABLE
-----------------------------

         B.       The Company has borrowed $750,000 from an unrelated company.
                  The mortgage and note are dated September 13, 2002. The term
                  of the note is for one (1) year. Payments of interest only on
                  the outstanding principal balance shall be paid monthly at a
                  rate of 10%. The first payment was paid on November 1, 2002
                  and on the first day of each month thereafter until October 1,
                  2003, when the Note shall mature and all principal and accrued
                  interest shall be due and payable in full. The Note was paid
                  in full on September 22, 2003 (See Note 4 A).

         C.       The Company has borrowed $335,000 from an unrelated Company.
                  The mortgage and Note are dated April 16, 2003. The loan is to
                  Able Energy New York, Inc., a wholly owned subsidiary. The
                  loan is collateralized by a mortgage on property in Lake
                  George, New York owned by the subsidiary and a second mortgage
                  on property in Bolton, New York, owned by the Company's CEO
                  who is also a guarantor on the loan. Payments of interest only
                  on the outstanding principal balance at a rate of 14% per
                  annum, are payable monthly. The first payment was paid June 1,
                  2003. The entire amount, both principal and accrued interest
                  shall be due and payable on May 1, 2004.

NOTE 6          LONG-TERM DEBT
------------------------------

                  Mortgage note payable dated, August 27, 1999, related to the
                  purchase of B & B Fuels facility and equipment. The total note
                  is $145,000. The note is payable in the monthly amount of
                  principal and interest of $1,721.18 with and interest rate of
                  7.5% per annum. The initial payment was made on September 27,
                  1999, and continues monthly until August 27, 2009 which is the
                  final payment. The note is secured by a mortgage made by Able
                  Energy New York, Inc. on property at 2 and 4 Green Terrace and
                  4 Horican Avenue, Town of Warrensburg, Warren County, New
                  York. The balance due on this Note at December 31, 2003 and
                  June 30, 2003 was $95,109 and $101,724, respectively.

                  Mortgage note payable dated, August 31, 1999, related to the
                  purchase of the facility and equipment in Rockaway, New Jersey
                  by Able Energy Terminal, LLC ("Terminal"). The note is in the
                  amount of $650,000.

                  Pursuant to Section 4.4 of the Agreement of Sale to purchase
                  the Terminal, , the Principal Sum of the $650,000 Note shall
                  be reduced by an amount equal to one-half of all sums expended
                  by Borrower on the investigation and remediation of the
                  property provided, however, that the amount of said reduction
                  shall not exceed $250,000 (the "Remediation Amount").

                  The Note is collateralized by the property and equipment
                  purchased and assignment of the leases. The Note was paid in
                  full on September 22, 2003 in the amount of $650,000 plus
                  interest of $7,895 (See Note 4 A).

                  The Company has long-term debt represented by Notes Payable
                  and capitalized leases collateralized by trucks, vans, office
                  and computer equipment. The total outstanding at June 30, 2003
                  was $1,433,731. On September 22, 2003, $1,084,866 of these
                  Notes, then outstanding, were paid in full (See Note 4 A).


                                       19

<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

          NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENT (Cont'd)
          ------------------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------


NOTE 7          INCOME TAXES

                  Effective January 1, 1997, the Company adopted Statement of
                  Financial Accounting Standards No. 109, Accounting for Income
                  Taxes.

                  The differences between the statutory Federal Income Tax and
                  Income Taxes Continuing Operation is accounted for as follows:

<TABLE>
<CAPTION>
                                                                                         2003

                                                                              AMOUNT              PERCENT
                                                                              ------              -------
<S>                                                                         <C>                      <C>
Statutory Federal Income Tax                                                $ 33,180                 15.0%
State Income Tax                                                              14,220                  6.5
                                                                              ------               ------

Income Taxes                                                                $ 47,400                 21.5%
                                                                            ========               ======

Income Taxes consist of:
 Current                                                                    $      -
 Deferred                                                                     47,400
                                                                            --------
    Total                                                                   $ 47,400
                                                                            ========

                                                                                         2002

                                                                                                PERCENT OF
                                                                                                  PRETAX
                                                                              AMOUNT              INCOME
Statutory Federal Income Tax                                                $ 60,410               34.0%
Federal Income Tax Reduction due to Carryforward
  Loss                                                                       (55,510)
State Income Tax (Note X)                                                     18,100                 5.9
State Income Tax Reduction due to Carryforward
Loss                                                                         (16,000)
                                                                            --------               -----

Income Taxes                                                                $  7,000               39.9%
                                                                            ========               ====

Income Taxes consists of:
Current                                                                     $      -
Deferred                                                                       7,000
                                                                            --------
     Total                                                                  $  7,000
                                                                            ========
</TABLE>

(Note X) The State of New Jersey has suspended the use of carryforward losses
         for the years 2002 and 2003. As such, state income taxes of $45,091
         have been shown as a deferred asset and as income taxes payable for the
         year ended June 30, 2003. New Jersey carryforward is treated separately
         by the Company. Able Oil Company has a New Jersey Operating Loss of
         $501,010 which could not be utilized in the current year ended June 30,
         2003. Under current New Jersey law, the carryforward will be available
         after 2003, the Company's fiscal year ending June 30, 2005.


                                       20

<PAGE>






                       ABLE ENERGY, INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

                       JUNE 30, 2003 AND DECEMBER 31, 2003


NOTE 7          INCOME TAXES (cont'd)
-------------------------------------

         The types of temporary differences between the tax bases of assets and
         liabilities and their financial reporting amounts that give rise to a
         significant portion of the deferred tax liability and deferred tax
         asset and their approximate tax effects are as follows at:

<TABLE>
<CAPTION>
                                                                        DECEMBER 31, 2003
                                                                        -----------------

                                                         TEMPORARY                 TAX
                                                        DIFFERENCE               EFFECT
                                                        ----------               ------
<S>                                                     <C>                     <C>
Depreciation and Amortization                           $ (273,019)             $(76,980)
Allowance for Doubtful Accounts                             90,472                29,012
Gain on Sale of Subsidiary                                  18,766                 4,035
New Jersey Net Operating Loss Carryforward                 501,010                45,091
(See Note X, Prior Page)
</TABLE>

<TABLE>
<CAPTION>
                                                                           JUNE 30, 2003
                                                                           -------------
                                                         TEMPORARY                 TAX
                                                        DIFFERENCE               EFFECT
                                                        ----------               ------
<S>                                                     <C>                     <C>
Depreciation and Amortization                           $ (241,993)             $(70,310)
Allowance for Doubtful Accounts                            279,913                69,742
Gain on Sale of Subsidiary                                  18,766                 4,035
New Jersey Net Operating Loss Carryforward                 501,010                45,091
(See Note X, prior page)
</TABLE>

         Able Energy, Inc., et al, open years are December 31, 2000 and June 30,
         2001, 2002 and 2003. The Company has a net operating loss carryforward
         of approximately $2,070,000. The net operating loss expires between
         June 30, 2019 and 2021.

         These carryforward losses are available to offset future taxable
         income, if any. The Company's utilization of this carryforward against
         future taxable income is subject to the Company having profitable
         operations or sale of Company assets which create taxable income. At
         this time, the Company believes that a full valuation allowance should
         be provided. The component of the deferred tax asset as of December 31,
         2003 are as follows:

             Net Operating Loss Carryforward - Tax Effect         $  728,205
             Valuation Allowance                                    (728,205)
                                                                   ---------
             Net Deferred Tax based upon Net
             Operating Loss Carryforward                          $   - 0 -
                                                                   =========



                                       21

<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------


NOTE 8           NOTE RECEIVABLE - SUBSIDIARY
---------------------------------------------

                  The Company has a Note Receivable from PriceEnergy.Com, Inc.
                  for advances made in the development of the business,
                  including hardware and software costs. All of PriceEnergy.Com,
                  Inc.'s assets are pledged as collateral to Able Energy, Inc.
                  The amount of the note is $1,350,000 dated November 1, 2000
                  with interest at 8% per annum payable quarterly. Principal
                  payments to begin two years after the date of the Note,
                  November 1, 2002. Through December 31, 2003, no principal has
                  been paid. No interest was accrued for the six months ended
                  December 31, 2003 or the six months ended June 30, 2003 as the
                  note is non performing. Unpaid accrued interest due through
                  June 30, 2003 is $234,000. The Note and accrued interest have
                  been eliminated in the consolidated financial statements (See
                  Notes 1 and 13). Able Oil Company has a Note Receivable
                  originally dated September 30, 2002 in the amount of
                  $1,510,372.73 from PriceEnergy.Com, Inc. The Note has been
                  updated for transactions resulting in a balance of $2,140,121
                  with interest at 8% per annum, to be paid quarterly. Principal
                  payments to begin one year after date of Note, October 1,
                  2003, and continue monthly thereafter. The Note is the result
                  of the transference of the unpaid accounts receivable which
                  resulted from the sale of heating oil through PriceEnergy.Com,
                  Inc. Able Oil Company has a second position as collateral in
                  all of the assets of PriceEnergy.Com, Inc. to Able Energy,
                  Inc. No interest has been recorded for the six months ended
                  December 31, 2003. Any payments will go to pay principal. The
                  note receivable and accrued interest have been eliminated in
                  consolidation against the amounts on PriceEnergy.Com, Inc.

NOTE 9          PROFIT SHARING PLAN
-----------------------------------

                  Effective January 1, 1997, Able Oil Company established a
                  Qualified Profit Sharing Plan under Internal Revenue Code
                  Section 401-K. The Company matches 25% of qualified employee
                  contributions. The expense was $12,657 (2003) and $11,512
                  (2002), for the six months ended December 31.

NOTE 10         COMMITMENTS AND CONTINGENCIES
---------------------------------------------

                  The Company is subject to laws and regulations relating to the
                  protection of the environment. While it is not possible to
                  quantify with certainty the potential impact of actions
                  regarding environmental matters, in the opinion of management,
                  compliance with the present environmental protection laws will
                  not have a material adverse effect on the financial condition,
                  competitive position, or capital expenditures of the Company.

                  In accordance with the agreement on the purchase of the
                  property on Route 46, Rockaway, New Jersey by Able Energy
                  Terminal, LLC, the purchaser shall commence after the closing,
                  the investigation and remediation of the property and any
                  hazardous substances emanating from the property in order to
                  obtain a No Further Action letter from the New Jersey
                  Department of Environmental Protection (NJDEP). The purchaser
                  will also pursue recovery of all costs and damages related
                  thereto in the lawsuit by the seller against a former tenant
                  on the purchased property. Purchaser will assume all
                  responsibility and direction for the lawsuit, subject to the
                  sharing of any recoveries from the lawsuit with the seller,
                  50-50.


                                       22

<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------


NOTE 10         COMMITMENTS AND CONTINGENCIES (cont'd)
------------------------------------------------------

                  The seller by reduction of its mortgage will pay costs related
                  to the above up to $250,000 (see Note 6). A settlement has
                  been achieved by the Company with regard to the lawsuit. The
                  settlement provides for a lump sum payment of $397,500 from
                  the defendants to the Company. In return, the defendants
                  received a release from the Estate (the Seller) and a release
                  and indemnification from the Company. The defendants provided
                  a release to Able Energy and the Estate. Pursuant to the
                  original agreement, the Estate receives 50% of the settlement
                  amount, net of attorney fees.

                  This has been amended by an agreement dated November 5, 2001.
                  The entire settlement, net of attorney fees, was collected and
                  placed in an attorney's escrow account for payment of all
                  investigation and remediation costs. Able Energy Terminal, LLC
                  has incurred costs of $102,956 to December 31, 2003, which are
                  included in Prepaid Expenses and must be presented to the
                  attorney for reimbursement. Per management, certain items such
                  as a performance bond are being finalized, then reimbursement
                  can be made.

                  The costs of the cleanup pursuant to the Agreement of Sale
                  must be shared equally (50/50) by the seller and purchaser up
                  to Seller's cap of $250,000. Seller's contribution to the
                  cleanup is in the form of a reduction to the Note and not by
                  direct payments. In the opinion of management, the Company
                  will not sustain costs in this matter which will have a
                  material adverse effect on its financial condition.

                  Able Oil Company is under contract to purchase #2 oil as
                  follows:

<TABLE>
<CAPTION>
                                                                                                Gallons Open           Open Dollar
                                                                                                 Commitment            Commitment
          Company                                     Period              Total Gallons          at 12/31/03          at 12/31/03
          -------                                     ------              -------------          -----------          -----------
<S>                                             <C>                       <C>                    <C>                  <C>
          Total Energy  Solutions, LLC          10/1/03 - 4/30/04               588,000              336,000             $254,846
          Conectiv Energy                       11/1/03 - 3/31/04             1,008,000              588,000              476,318
          Center Oil                            12/1/03 - 2/28/04               252,000              168,000              134,904
          Petrocom                              11/1/03 - 3/31/04               462,000              336,000              258,384
          Sunoco (1)                            12/1/03 - 2/28/04               210,000              168,000              153,224
          Petrocom (1)                          11/1/03 - 3/31/04               336,000              210,000              162,288

          Total                                                               2,856,000            1,806,000           $1,439,964
</TABLE>

(1)   Product for two franchisees, contracts with Able Oil Company


                                       23

<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

                       JUNE 30, 2003 AND DECEMBER 31, 2003


NOTE 10         COMMITMENTS AND CONTINGENCIES (cont'd)
------------------------------------------------------

                  Able Energy New York, Inc. is under contract to purchase #2
                  oil as follows:

<TABLE>
<CAPTION>
                                                                                  Gallons Open           Open Dollar
                                                                                   Commitment            Commitment
          Company                       Period              Total Gallons          at 12/31/03          at 12/31/03
          -------                       ------              -------------          -----------          -----------
<S>                               <C>                       <C>                    <C>                  <C>
          Sprague                 11/1/03 - 2/28/04               126,000               84,000              $68,880
                                                            -------------          -----------          -----------

          Total                                                   126,000               84,000              $68,880
                                                            =============          ===========          ===========
</TABLE>

                  Following an explosion and fire that occurred at the Able
                  Energy Facility in Newton, NJ on March 14, 2003, and through
                  the subsequent clean up efforts, Able Energy has cooperated
                  fully with all local, state and federal agencies in their
                  investigations into the cause of this accident.

                  On April 2, 2003, Able Energy received a Notice Of Violation
                  from the New Jersey Department of Community Affairs ("DCA")
                  citing a total of 13 violations to the New Jersey
                  Administrative Code, Liquefied Petroleum Gas. Twelve of the
                  violations were assessed a penalty of $500 each. One of the
                  violations, regarding the liquid transfer from one truck to
                  another truck, was assessed a penalty of $408,000, a second
                  notice was received on April 29, 2003, for an alleged
                  violation on April 12, 2003, and a fine of $5,500 was assessed
                  for a total of $419,500. This amount is included in accrued
                  expenses at June 30, and December 31, 2003.

                  The DCA document is currently under review by counsel. Based
                  upon initial review, the company disagrees with many of the
                  findings of the report and disputes many of the allegations.
                  The company has contested the DCA Notice of Violation and the
                  assessed penalties. Counsel and the DCA have had several
                  meetings and hearings are currently docketed in the Office of
                  Administrative Law (See Note 22).

                  Other violations have been sited by the NJ DCA. The penalties
                  assessed amount to $4,000. The Company has appealed the
                  assessments to the Office of Administrative Law.

                  Company personnel met with personnel of the United States
                  Occupational Safety and Health Administration ("OSHA") on
                  September 12, 2003. OSHA has conducted an investigation
                  relating to the safety practices of the Company, including
                  such practices relating to the March 14, 2003 explosion and
                  fire. OSHA has informed the Company it will be assessed a
                  penalty of $16,000 based upon violations sited. This amount is
                  included in Accrued Expenses at June 30, and December 31,
                  2003.


                  The Sussex County, New Jersey, Prosecutor's Office is
                  conducting and investigation as a result of the March 14, 2003
                  explosion and fire. No determination has been made with
                  respect to its investigation.


                                       24
<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

                       JUNE 30, 2003 AND DECEMBER 31, 2003

NOTE 10         COMMITMENTS AND CONTINGENCIES (cont'd)
------------------------------------------------------

                  In a complaint dated October 6, 2003, the New Jersey
                  Department of Community Affairs commenced a civil action
                  against the Company seeking injunctive relief enjoining the
                  Company, its subsidiaries, affiliated companies, agents,
                  employees and corporate officers, from engaging in the
                  distribution, sale, purchase or receipt of liquified petroleum
                  gas. Pursuant to an order dated October 15, 2003, the Superior
                  Court of New Jersey ordered a hearing to be held on November
                  12, 2003, at which time the Company shall show cause why a
                  preliminary injunction shall not be ordered preliminarily
                  enjoining the Company, its subsidiaries, affiliate companies,
                  agents, employees and corporate officers, from engaging in the
                  distribution, sale, purchase or receipt of liquified petroleum
                  gas and from engaging in any form of business operations for
                  the distribution and sale of liquified petroleum gas.

                  Certain temporary restraints were also ordered upon the
                  Company which are still imposed as the result of a November 12
                  hearing. The order requires the Company to retain the
                  assistance of Boyer Safety Services, experts in the propane
                  industry, to assume responsibility and authority of Able
                  Propane's daily operational, compliance an/or safety issues
                  relating to its propane business.

                  The order prohibits Able Propane from entering into any new
                  delivery or installation contracts for the delivery of propane
                  other than those customers existing on the date of the order.
                  Able Propane may, however, honor contracts, commitments or
                  arrangements entered into prior to the date of the order.

                  The Company is vigorously disputing that it is a proper party
                  to the action and is contesting any administrative and
                  equitable remedies sought by the Department of Community
                  Affairs.

                  A lawsuit has been filed against the Company by property
                  owners who allegedly suffered property damages as a result of
                  the March 14, 2003 explosion and fire. The Company's insurance
                  carrier is defending as related to compensatory damages. Legal
                  counsel is defending on the punitive damage claim. Per legal
                  counsel, it is too early in the process to assess the outcome,
                  in their opinion, the matter will not be certified as a Class
                  Action.

                  As a result of the March 14, 2003 explosion and fire, various
                  claims for property damage have been submitted to the
                  Company's insurance carrier. These claims are presently being
                  handled and, in many cases, settled by the insurance carrier's
                  adjuster. There are approximately 200 claims being handled and
                  adjusted with reserves for losses established as deemed
                  appropriate by the insurance carrier.

                  The Company in the normal course of business has been involved
                  in law suits. Current suits are being defended by the
                  insurance carrier and should be covered by insurance.


                                       25
<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND December 31, 2003
                       -----------------------------------



NOTE 11         OPERATING LEASE
-------------------------------

                  Able Energy Terminal, LLC, has acquired the following lease on
                  the property it purchased on Route 46 in Rockaway, New Jersey.

                  The lease with Able Oil Company, a wholly owned subsidiary of
                  Able Energy, Inc., has an expiration date of July 31, 2004.
                  The lease provides for a monthly payment of $1,200 plus a one
                  cent per gallon through put, as per a monthly rack meter
                  reading.

                  Estimated future rents are $14,400 per year, plus the one cent
                  per gallon through put charges per the monthly rack meter
                  readings.

                  The Company leased 9,800 square feet in the Rockaway Business
                  Centre on Green Pond Road in Rockaway, New Jersey. The
                  facility will be used as a call center and will combine the
                  administrative operations in New Jersey in one facility. The
                  lease has a term of five (5) years from August 1, 2000 through
                  July 31, 2005.

                  The rent for the first year is $7,145.83 per month and the
                  second through fifth year is $7,431.67 per month, plus 20.5%
                  of the building's annual operational costs and it's portion of
                  utilities. The current monthly rent, including Common Area
                  Charges, is $9,799.04 per month.

                  The lease does not contain any option for renewal. The rent
                  expense was $29,237 for the three months ended December 31,
                  2003. The estimated future rents are as follows:

                          YEAR ENDED JUNE 30,
                          -------------------
                                  2004                     $ 117,588
                                  2005                       117,588
                                  July 2005                    9,799
                                                           ---------
                                           Total           $ 244,975
                                                           =========


                  The following summarizes the month to month operating leases
                  for the other subsidiaries:

                   Able Oil Melbourne                 $500.00, per month
                                                      Total rent expense, $3,000
                   Able Energy New York               $600.00, per month
                                                      Total rent expense, $3,600


                                       26
<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------




NOTE 12          FRANCHISING
----------------------------

                  The Company sells franchises permitting the operation of a
                  franchised business specializing in residential and commercial
                  sales of fuel oil, diesel fuel, gasoline, propane and related
                  services. The Company will provide training, advertising and
                  use of Able credit for the purchase of product, among other
                  things, as specified in the Agreement. The franchisee has an
                  option to sell the business back to the Company after two (2)
                  years of operations for a price calculated per the Agreement.

                  The Company signed its first franchise agreement in September
                  2000. On June 29, 2001, PriceEnergy.Com Franchising, LLC, a
                  subsidiary, signed its first franchise agreement. The
                  franchisee will operate a B-franchised business, using the
                  proprietary marks and a license from PriceEnergy.Com, Inc. and
                  will establish the presence of the franchisee's company on the
                  PriceEnergy Internet Website. The franchisee will have the
                  exclusive territory of Fairfield County, Connecticut as
                  designated in the agreement. No new franchise agreements have
                  been signed.


NOTE 13         RELATED PARTY TRANSACTIONS
------------------------------------------

                  $44,690 is due from the major Shareholder/Officer of the
                  Company. This amount is evidenced by a Note bearing interest
                  at a rate of 6% between the Shareholder and the Company. This
                  Shareholder has loaned the Company a total of $380,000 as of
                  June 30, 2003 and December 31, 2003, as evidenced by a Demand
                  Note with interest at 6% per annum, which can be paid all or
                  in part at any time without penalty. The balance of the new
                  note is $364,878 at December 31, 2003. Interest expense has
                  been accrued in the amount of $9,606 for the six months ending
                  December 31, 2003.

                  The following officers of this Company own stock in the
                  subsidiary, PriceEnergy.Com, Inc., which they incorporated in
                  November 1999.

                           Chief Executive Officer                      23.5%
                           President                                      3.6%

                  No capital contributions have been made by these officers (See
                  Notes 1 and 8).


                                     27
<PAGE>



                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------



NOTE 14         EARNINGS PER SHARE
----------------------------------

                  The shares used in the computation of the Company's basic and
                  diluted Earnings Per Common Share are as follows:

<TABLE>
<CAPTION>
                                                                    DECEMBER 31,      DECEMBER 31,
                                                                        2003              2002
                                                                    ------------      -------------
<S>                                                                 <C>               <C>
                  Weighted Average of Common
                         Shares Outstanding Used in Basic
                       Earnings Per Share                                 2,013,250       2,006,855

                  Dilutive Effect of:
                      Employee Stock Options                                   -             50,657
                      Stock Warrants                                           -                  -
                                                                    ------------      -------------
                  Weighted Average Common Shares
                       Outstanding Used in Diluted
                        Earnings Per Share                             2,013,250          2,057,512
                                                                    ============      =============
</TABLE>


                 Weighted average common shares outstanding, assuming dilution,
                  includes the incremental shares that would be issued upon the
                  assumed exercise of stock options, and stock warrants. For
                  2003, approximately 389,000 of the company's stock options and
                  stock warrants were excluded from the calculation of diluted
                  earnings per share because their inclusion would have been
                  anti- diluted, 335,183 (2002). These options and warrants
                  could be dilutive in the future. The numerator for the
                  calculation of both basic and diluted earnings per share is
                  the earnings or loss available for common stockholders. The
                  above table shows the denominator for basic and diluted
                  earnings per share.

NOTE 15          STOCK OPTION PLANS
-----------------------------------

                  The Company has stock option plans under which stock options
                  may be issued to officers, key employees, and non-employee
                  directors to purchase shares of the Company's authorized but
                  unissued common stock. The Company also has a stock option
                  plan under which stock options may be granted to employees and
                  officers.

                  Options granted currently expire no later than 3 to 5 years
                  from the grant and have vesting periods from none to 25% at
                  grant and 25% each anniversary.


                                       28

<PAGE>




                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------

NOTE 15          STOCK OPTION PLANS
-----------------------------------

                                                         OUTSTANDING OPTIONS
                                                         -------------------
                            NUMBER OF SHARES     EXERCISE PRICE        TERM
                            ----------------     --------------        ----
January 6, 2000
   Grants                            56,000          $5.00            5 years
   Exercises                              0

December 21, 2000
   Grants                            60,000          $1.80            5 years
   Exercises                              0

   Grants                            23,000          $2.25            5 years
   Exercises                              0

October 22, 2002
   Grants                            50,000          $3.00            5 years
   Exercises                              0


NOTE 16         STOCK WARRANTS
------------------------------

                  The Company has issued stock warrants as follows:

         D.       60,000 Common Stock Purchase Warrants at $4.81 per share,
                  effective August 31, 2000, and expiring August 31, 2005, to
                  Andrew Alexander Wise & Company in connection with an
                  investment banking advisory agreement with the Company, dated
                  July 1, 2000.

         E.       40,000 Common Stock Purchase Warrants at $4.00 per share,
                  effective June 26, 2001 and expiring June 26, 2004, in
                  connection with a $500,000 Note Payable (See Note 5). These
                  warrants have not been registered under the Securities Act of
                  1933.


         F.       100,000 Common Stock Purchase Warrants at $4.00 per share,
                  effective September 13, 2002, and expiring September 13, 2004,
                  in connection with a $750,000 Note Payable (see Note 5).

                  The 200,000 warrants to purchase shares of common stock were
                  outstanding during the third quarter of 2003 and were not
                  included in the computation of diluted EPS as the warrants'
                  were all higher than the average stock price of $3.36 and
                  would have been anti-diluted (See Note 14). These warrants
                  have not been registered under the Securities Act of 1933.




                                       29

<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
               ---------------------------------------------------

                       JUNE 30, 2003 AND DECEMBER 31, 2003
                       -----------------------------------


NOTE 17           COMPENSATED ABSENCES
--------------------------------------

                  There has been no liability accrued for compensated absences;
                  as in accordance with Company policy, all compensated
                  absences, accrued vacation and sick payment must be used by
                  December 31st.

NOTE 18           CASH FLOW INFORMATION
---------------------------------------

                  The Directors received Common Stock as payment of Directors'
                  Fees, $24,000, in the quarter ended September 30, 2002. No
                  cash was received or paid.

NOTE 19           INSURANCE CLAIM
---------------------------------

                  The Company suffered a loss on March 14, 2003 of a building,
                  trucks, leasehold improvements, product inventory and
                  equipment as well as cost of cleanup and restoration. The
                  Company has filed an insurance claim. The insurance adjusters
                  are in the process of finalizing the amounts to be paid to the
                  Company. The estimated costs not reimbursed are $828,786.47
                  and is currently shown as deferred costs insurance claims on
                  the balance sheet. Management anticipates the insurance
                  recovery will cover the company costs. The following is a
                  summary of insurance claims filed:

                    Building (commercial property)    $349,526
                    Paid by December 31, 2003          349,526
                                                      --------
                    Contents                                          $387,984
                    Vehicles                          $302,674
                    Paid by December 31, 2003           247,409         55,265
                                     --- ----         ---------       --------
                                     Total                            $443,249
                                                                      ========

                  The above amounts were submitted as claims but do not
                  represent a settlement with the insurance carriers.

NOTE 20           BUSINESS SEGMENT INFORMATION
----------------------------------------------

                  The Company does not have separate operating financial
                  segments. The financial information is evaluated on a company
                  wide basis. As such, no segment reporting is prepared for
                  internal use.

NOTE 21           RECLASSIFICATION
----------------------------------

                  The Company has entered into a financing agreement with UPS
                  Capital Business Credit, that permits the Company to borrow a
                  $4,300,000 term loan, payable over fifteen (15) years. The
                  loan closed on September 22, 2003 (see Note 4). The Company
                  used the funds in part to repay short-term debt of $3,170,000,
                  a bank loan of $1,270,000 and other notes totaling $1,900,000.
                  In accordance with Financial Accounting Standards Board FAS6,
                  the refinanced short-term debt at June 30, 2003, has been
                  reclassified to long-term as "Short-Term Debt Refinanced".


                                       30


<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

ABLE ENERGY, INC. AND SUBSIDIARIES

Statements  in this  Quarterly  Report on Form 10-Q  concerning  the Company's
outlook  or future  economic  performance,  anticipated  profitability,  gross
billings,  expenses  or  other  financial  items,  and  statements  concerning
assumptions made or exceptions to any future events,  conditions,  performance
or other  matters are "forward  looking  statements,"  as that term is defined
under the Federal Securities Laws.  Forward-looking  statements are subject to
risks,  uncertainties,  and other  factors that would cause actual  results to
differ  materially  from those  stated in such  statements.  Such  risks,  and
uncertainties  and  factors  include,  but are not  limited to: (i) changes in
external  competitive  market  factors or trends in the  Company's  results of
operation;  (ii) unanticipated  working capital or other cash requirements and
(iii)  changes in the Company's  business  strategy or an inability to execute
its   competitive   factors  that  may  prevent  the  Company  from  competing
successfully in the marketplace.

         REVENUE RECOGNITION

         Sales of fuel and heating  equipment  are  recognized  at the time of
         delivery to the customer,  and sales of equipment  are  recognized at
         the  time of  installation.  Revenue  from  repairs  and  maintenance
         service  is  recognized  upon  completion  of the  service.  Payments
         received from customers for heating  equipment  service contracts are
         deferred and  amortized  into income over the term of the  respective
         service contracts,  on a straight-line  basis, which generally do not
         exceed one year.

         RESULTS OF OPERATIONS

         SIX MONTHS ENDED DECEMBER 31, 2003, COMPARED TO THE SIX MONTHS ENDED
         DECEMBER 31, 2002.

         The  Company  reported  revenues  of  $19,277,562  for the six months
         ended  December 31, 2003,  an increase of 3.16% over the prior year's
         revenues  for  the  same  six-month  period.  This  increase  can  be
         attributed  primarily to the  Company's  continued  aggressive  sales
         activities,  which resulted in a growing  customer base as well as an
         increase  in  commercial  sales as well as #2 heating oil and propane
         gas. In fiscal year 2002,  management  instituted a business  plan to
         market and sell other liquid products,  specifically  propane gas and
         diesel fuel during the warmer  months.  These changes were  initiated
         to help  even out the  seasonality  of the  Company's  business  when
         heating  related sales are generally  down.  Management has committed
         to a reasonable  gross margin  percentage to allow for  profitability
         on the sale of these products.

         Gross profit margin, as a percentage of revenues,  for the six months
         ended  December  31,  2003,  vs.  2002  was a  decrease  of  5.28% or
         $912,437.  The decrease in margin was the result of the  dramatically
         rising  product  costs  during the months of  October,  November  and
         December.  Retail  pricing was adjusted  appropriately  to cover most
         of  the  increases   while   continuing  to  maintain  the  company's
         competitive position in the marketplace.

         Selling,  General,  and  Administrative  expenses,  as a  percent  of
         sales,  increased  by 3.52%  from  13.01%  in the six  months  ending
         December  31, 2002 to 16.53%  during the same  period in 2003.  There
         were   increases  in  payroll,   advertising,   vehicle   repair  and
         maintenance,   bank  charges,   interest  expense,   a  write-off  of
         uncollectible  accounts and an increase in insurance costs due to the
         unsettled  insurance market.  Management will continue to monitor the
         fiscal  budget  against  actual  results  on  an  ongoing  basis  and
         strengthen   its   efforts  to  reduce  SG&A  as  a   percentage   of
         sales.

<PAGE>

         Operating  loss  for the six  months  ended  December  31,  2003  was
         $(1,382,562),  an  increase  of 100+%  over the  Company's  operating
         income of $324,554 for the six months ended  December 31, 2002.  This
         increased  operating loss for the six months was directly  related to
         the increased operating costs and lower gross profit.

         Net loss for the six months  ended  December  31, 2003  increased  by
         $2,298,074  to  $2,103,492  as  compared  to the same  period for the
         previous  year income of $194,582.  This net loss was the result of a
         lower  gross  profit  margin due to higher  product  costs and higher
         operating  costs during this  six-month  period as well as additional
         interest   on   refinancing   and  legal   costs.   The  company  has
         experienced  higher operating costs related to professional  fees and
         other expenses  related to the March 14, 2003 explosion at its Newton
         facility.



         OPERATIONAL EFFICIENCIES

         The  Company is  evaluating  several  alternatives  to  increase  the
         utilization of existing  personnel and equipment,  to reduce expenses
         and   increasing   profitability,   within   its   current   business
         configuration.  Currently,  since the March  14th 2003  explosion  at
         its  Newton,  New  Jersey  location,  the  company is  operating  the
         business of its main  subsidiary,  Able Oil Co. out of the  Rockaway,
         New Jersey  facility.  This has caused an increase in operating costs
         due  to  increased   travel   distances   for  service  and  delivery
         vehicles.  The company is  currently  seeking  approval to rebuild at
         the Newton  location  or a similar  suitable  location  in the Sussex
         County New Jersey area to reduce expenses and increase efficiency.

         The  Company  believes  that  there  is  value  to the  products  and
         services  that it provides to its  consumers in varying  levels based
         upon the specific  needs of the  consumer and the products  provided.
         While  gross  margins for the period  October to  December  2003 were
         temporarily  lower due to a dramatic rise in the cost of distillates,
         the company  believes that its margin  management  program is working
         and has been expanded to include equipment sales and services.

         On October 1st The  Company  began  billing  for its in home  heating
         repairs  utilizing a  methodology  known as "Flat Rate  Pricing",  an
         approach  similar to that used in the automobile  repair field.  Flat
         rate  pricing  will be  introduced  in stages  with the  first  phase
         having  commenced  in October.  This  system  gives sales and service
         personnel  the ability to offer the  customer an easy to  understand,
         "package  approach" to repairs and equipment  installations  with one
         or two line  billings per invoice.  This system will  interface  with
         the  Company's  automated  dispatch  communications  program that was
         introduced  last year.  It is  anticipated  that this  system will be
         fully implemented by the end of the current fiscal year.



         OPERATING SUBSIDIARY

         The  company's  operating  subsidiary,  PriceEnergy  with its  modern
         order-processing   platform   is  now  in  its  third  full  year  of
         operation.   The  revolutionary   proprietary   technology  is  fully
         automated   and  allows  for  the   removal  of  the   inefficiencies
         associated  with  traditional   heating  oil  companies  within  this
         industry.  PriceEnergy  has generated  over 2 million  gallons in new
         business  last year,  which were  delivered by  PriceEnergy's  dealer
         network.  In December 2002,  PriceEnergy  began sales of Home Heating
         Oil in the initial  BJ's  Wholesale  Club.  Since then,  gallons sold
         through this venue have been  increasing  with each week. The Company
         is  excited  about the new sales  opportunity  with its new  "Channel
         Partner",  BJ's. The Company  believes that this is the first of many
         prime  retail  opportunities  to utilize  the  PriceEnergy  operating
         platform  to open new markets  for the sales of heating  oil,  diesel
         fuel, and propane gas.

<PAGE>

         EXPLOSION AND FIRE

         On March 14, 2003,  Able Energy  experienced an explosion and fire at
         its Newton,  New Jersey facility which resulted in the destruction of
         an  office  building  on the site,  as well as  damage to 18  company
         vehicles  and  neighboring  properties.   Fortunately,   due  to  the
         immediate  response by employees at the site, a quick  evacuation  of
         all  personnel  occurred  prior  to  the  explosion,  preventing  any
         serious injuries.

         The  results  of  the  company's   investigation  indicate  that  the
         explosion  was an accident that occurred as a result of a combination
         of human  error,  mechanical  malfunction,  as well as the failure to
         follow  prescribed  state  standards  and company  policy for propane
         delivery  truck  loading.  On April 3, 2003,  Able Energy  received a
         Notice of  Violation  from the New  Jersey  Department  of  Community
         Affairs.   The  dollar  amount  of  the  assessed   penalty   totaled
         $414,000.  Able Energy has  contested the notice of Violation as well
         as the  assessed  penalties  with  the  State  of New  Jersey  and is
         currently  working  with  the  Department  of  Community  Affairs  to
         negotiate a settlement.

         The  Company  has taken the  lessons  learned  from this  event  very
         seriously.  Able  Energy has worked  closely,  and  cooperated  fully
         with all local and state  officials in clean-up  phase,  tank testing
         process,  and  subsequent  investigations.  Strict and clear employee
         communications  have taken  place to  reinforce  compliance  with all
         governmental  regulations as well as all company  policies  regarding
         the safe and proper  handling  of propane.  The Company has  retained
         the  assistance  of Boyer  Safety  Services,  experts in the  propane
         industry;  to hold  safety-training  sessions for all propane related
         employees.  This training  will be ongoing and will upgrade  employee
         training  to the  most  modern  and  up-to-date  levels  as  well  as
         reinforce  Able  Energy's  commitment  to operate  all aspects of the
         company in a professional, responsible, and safe manner.

         The Company is currently not processing  deliveries  from the Newton,
         New  Jersey   facility   while  it  appeals   the  Newton   Board  of
         Adjustment's  decision  to  deny  operations  at this  location.  The
         company is also  contesting  the  adoption  of the zoning  ordinance,
         which  changed the zoning to a  non-permitted  use. In the  meantime,
         company  operations  have  continued  throughout the aftermath of the
         incident  using  its main  distribution  facility  in  Rockaway,  New
         Jersey along with temporary `through-put'  agreements with other area
         marketers.  While these  arrangements  permit the company to continue
         to operate,  greater efficiency and customer service will be achieved
         by a location in the Sussex  County  area,  as the  Company  believes
         that  its  Newton  facility  is  crucial  to its  future  operations,
         especially  during  the  winter  heating  season.  The  company  will
         continue  to work  diligently  to obtain  approval to resume its core
         heating oil operations at the Newton site.



         RECENTLY IMPLEMENTED TECHNOLOGICAL PROCEDURES

         The  Company  has  established  goals,  which  will  be  accomplished
         through  the  implementation  of some  modern  technologies  that are
         currently being installed into the Company's existing infrastructure.

         The Company began introducing  additional customer service technology
         to its  Rockaway  call and  administrative  center  during the second
         fiscal  quarter of 2002/2003.  Management  believes that by providing
         enhancements to existing telephony hardware and in-house  management,
         the  Company's  call center  environment  will be  provided  with the
         ability to respond to changing call patterns,  both higher and lower,
         without  the  expense of clerical  over-staffing  to meet  unrealized
         needs.  New  software  will  provide  customers  with the  option  of
         placing an order via a voice activated  technology.  This will enable
         customers who simply wish to refill their fuel tank, the  opportunity
         to quickly  place an order 24 hours a day  without the help of a live
         customer service representative.

<PAGE>

         The Company is now  beginning  full  implementation  of the  recently
         announced  automated dispatch  technology,  which provides management
         with  the   ability   to   communicate   with   service   technicians
         instantaneously.   This  system  also  is  now   performing   billing
         functions at the customer's  location as well as documenting  payment
         data  instantaneously.  Additionally,  management is now aware of the
         status of every  on-duty  worker and obtains real time  reporting for
         stand-by,  en-route,  and service work time. This enables the Company
         to  maximize   scheduling   opportunities  and  eliminating   service
         technician down time.




         LIQUIDITY AND CAPITAL RESOURCES

         For the six months  ended  December  31,  2003,  compared  to the six
         months  ended   December  31,  2002,   the  Company's  cash  position
         increased by $258,503 from  $133,031 to $391,534.  For the year ended
         June 30, 2003, cash was generated  through loans,  one from a private
         company of $750,000 and officer  loan in excess of  $300,000.  In the
         quarter  ending  December  31,  2003,  the  Company  entered  into an
         agreement  and closed a new loan  facility.  The facility  provided a
         term loan of  $4,300,000,  payable  over 15 years.  These  funds were
         used  to pay  existing  debt.  There  is  also a line  of  credit  of
         $700,000.  This will  enable the  Company to  continue  to grow while
         strengthening its  infrastructures.  The Company also generated funds
         from customer  advance  payments.  The Company is in  negotiations to
         sell certain product lines,  which should generate  substantial cash,
         which will be used as working capital and also debt reduction.

         SEASONALITY

         The Company's operations are subject to seasonal  fluctuations,  with
         a majority of the Company's  business  occurring in the late fall and
         winter  months.  Approximately  70% of  the  Company's  revenues  are
         earned  and  received  from  October  through  March,  most  of  such
         revenues  are  derived  from  the  sale  of  home  heating   products
         including  propane gas and home heating oil.  However the seasonality
         of the  Company's  business  is offset,  in part,  by an  increase in
         revenues  from the sale of HVAC  products  and  services,  diesel and
         gasoline  fuels  during  the spring  and  summer  months,  due to the
         increased use of automobiles and construction apparatus

         From May  through  September,  Able Oil can  experience  considerable
         reduction of retail  heating oil sales.  Similarly,  Able Propane can
         experience  up to an 80% decrease in heating  related  propane  sales
         during the months of April to September,  this is offset  somewhat by
         increased  sales of  propane  gas used for pool  heating,  heating of
         domestic hot water in homes and fuel for outdoor cooking equipment.

         Over 90% of Able  Melbourne's  revenues  are derived from the sale of
         diesel  fuel  for   construction   vehicles,   and   commercial   and
         recreational  sea-going  vessels  during  Florida's  fishing  season,
         which begins in April and ends in November.  Only a small  percentage
         of Able  Melbourne's  revenues  are  derived  from  the  sale of home
         heating fuel. Most of these sales occur from December  through March,
         Florida's cooler months.

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

As of December 31, 2003, an evaluation was performed under the supervision
and with the participation of the Company's management, including the
Principal Executive Officer and the Principal Accounting Officer, of the
effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based on that evaluation, the Company's management,
including the Principal Executive Officer and the Principal Accounting
Officer, concluded that the Company's disclosure controls and procedures were
effective as of December 31, 2003. There have been no significant changes in
the Company's internal controls or in other factors that could significantly
affect internal controls subsequent to December 31, 2003.


<PAGE>
                                     PART II
                                OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS

      In a complaint dated October 6, 2003, the New Jersey Department of
Community Affairs commenced a civil action against the Company seeking
injunctive relief enjoining the Company, its subsidiaries, affiliated companies,
agents, employees and corporate officers, from engaging in the distribution,
sale, purchase or receipt of liquified petroleum gas. Pursuant to an order dated
October 15, 2003, the Superior Court of New Jersey ordered a hearing to be held
on November 12, 2003, at which time the Company shall show cause why a
preliminary injunction shall not be ordered preliminarily enjoining the Company,
its subsidiaries, affiliate companies, agents, employees and corporate officers,
from engaging in the distribution, sale, purchase or receipt of liquified
petroleum gas and from engaging in any form of business operations for the
distribution and sale of liquified petroleum gas.

      Certain temporary restraints were also ordered upon the Company which will
be imposed until the conclusion of the November 12 hearing. The order requires
the Company to retain the assistance of Boyer Safety Services, experts in the
propane industry, to assume responsibility and authority of Able Propane's daily
operational, compliance an/or safety issues relating to its propane business.

      The order prohibits Able Propane from entering into any new delivery or
installation contracts for the delivery of propane other than those customers
existing on the date of the order. Able Propane may, however, honor contracts,
commitments or arrangements entered into prior to the date of the order.

      The Company is vigorously disputing that it is a proper party to the
action and is contesting any administrative and equitable remedies sought by the
Department of Community Affairs.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

      None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

      None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

<PAGE>

      None.

ITEM 5.  OTHER INFORMATION

      None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      (a)  Exhibits


31.1             Certification by Chief Executive Officer pursuant to
                           Sarbanes-Oxley Section 302

31.2             Certification by Chief Financial Officer pursuant to
                           Sarbanes-Oxley Section 302

32.1             Certification by Chief Executive Officer pursuant to
                           18 U.S. C. Section 1350

32.2             Certification by Chief Financial Officer pursuant to
                           18 U.S. C. Section 1350

      (b)  Reports on Form 8-K

      The Company did not file any reports on Form 8-K during the six months
ended December 31, 2003.

<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on this 17th day of February 2004.


                                           ABLE ENERGY, INC.


                                           /s/ Timothy Harrington
                                           --------------------------------
                                           Timothy Harrington, Chief Executive
                                           Officer, Secretary, and Chairman

                                           /s/ Christopher P. Westad
                                           --------------------------------
                                           Christopher P. Westad, President,
                                           Chief Financial Officer, and Director